Labour Court Database __________________________________________________________________________________ File Number: CD95386 Case Number: LCR14866 Section / Act: S26(1) Parties: SAEHAN MEDIA IRELAND LIMITED - and - EMPLOYEE COUNCIL |
Pay increase.
Recommendation:
The Court has given careful consideration to all the points made
by the parties in their lengthy written and oral submissions. The
Court also examined in detail the financial information submitted.
Taking into account all the circumstances of the case the Court
recommends that the Company increase its offer for phase 2 of the
P.C.W. to a total of 4% from 1st March, 1995 and that this revised
offer be accepted.
The Court notes that the Company has offered to introduce a full
job evaluation system that would deal with the relative value of
job slots. The Court is of the view that this is the best way
forward for the employees and accordingly recommends the setting
up of a joint job evaluation (with professional assistance if
necessary) during the currency of phase 2 of P.C.W..
It was obvious at the hearing that there has been a problem with
communication between the management and the Employee Council.
The Court urges both parties to address this problem as a matter
of urgency.
Division: Ms Owens Mr Pierce Mr Walsh
Text of Document__________________________________________________________________
CD95386 RECOMMENDATION NO. LCR14866
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
SAEHAN MEDIA IRELAND LIMITED
AND
EMPLOYEE COUNCIL
SUBJECT:
1. Pay increase.
BACKGROUND:
2. The Company which is a subsidiary of the Saehan Media
Corporation of the Republic of South Korea, commenced
operations in Sligo in 1991. It employs approximately 450
workers in the manufacture of video tapes in cassette and
bulk reel form, for the European market. The majority of
these employees work on 2,3 and 4 cycle shift systems.
When the Company was established in 1991 the majority of the
workers joined Services Industrial Profession Technical Union
(S.I.P.T.U.) but the Company refused recognition. A strike
was threatened but strike notice was subsequently withdrawn.
An Employee Council was formed to deal with negotiations in
regard to pay and conditions.
The Company and Council agreed a one year pay agreement with
effect from 1st March, 1994 which provided for an increase of
3% (1% more than the terms of the Programme for
Competitiveness and Work (P.C.W.). The Company wanted a 3
year agreement and offered 10.5%, which was rejected by the
Council.
In early 1995, the Council submitted a claim for an increase
of 14.5% for a 1 year agreement effective from 1st March,
1995. The Company rejected the claim. Local level
discussions took place but no agreement was reached and the
matter was referred to the Labour Relations Commission.
Conciliation conferences took place on 24th May and 7th June,
1995. As no agreement was reached the dispute was referred
to the Labour Court on 29th June, 1995 under Section 26(1) of
the Industrial Relations Act, 1990. A Labour Court hearing
took place in Sligo on 18th July, 1995.
COUNCIL'S ARGUMENTS:
3. 1. The rates of pay of the workers concerned are
substantially out of line with the average national
basic rate for workers employed in companies of
comparable size. The P.C.W. states in regard to new
companies, "Where rates of pay are substantially below
levels appropriate to the trade or industry in question,
the Labour Court shall not be precluded by the provision
of the pay agreement from making recommendations on the
merits of the case".
2. Included in the Council's claim is an internal
relativity claim of 6% to take account of the Company's
decision to increase the rates of pay of a small group
of workers, i.e., team leaders and assistant
technicians.
3. The workers concerned have made a considerable
contribution to the Company's progress. It took the
Company just 5 months to achieve the I.S.O. 9002
accreditation.
4. The morale of the workers is extremely low. The
Company's paltry wage payment policy has increased
in-house pressure from staff for trade union membership
and recognition. The Labour Court has, in recent times,
recommended in favour of workers in similar
circumstances.
COMPANY'S ARGUMENTS:
4. 1. The Company is in a serious financial position (details
supplied). Its accumulated losses are substantial and
its projections for 1995 are not materialising. Major
changes in video tape manufacturing continue, with many
companies ceasing or curtailing operations. There is a
trend for relocation to countries such as China and
India and competition from such countries is severe.
2. The Company has attempted to meet the terms of the
P.C.W. and to provide some small margin over and above
the P.C.W. in order to achieve industrial relations
stability. This has become extremely difficult given
the serious deterioration in the Company's trading and
financial position over recent years.
3. Management's philosophy is considerably different to the
western management philosophy. A positive feature of
this philosophy is that the Company seeks to protect its
permanent employees and despite poor trading conditions
it has not to date introduced any short time or
lay-offs.
4. The Company is committed to remaining in the region. It
is seeking to make a further major investment into
Europe and Ireland is a real option. However, the
survival and stability of the plant will have a
determining effect on the eventual decision made in this
respect. Other Korean companies are also monitoring
Saehan's success in Ireland.
5. The Company has a young workforce, many of whom have
family responsibilities. This has led to claims for
large pay increases. It is not possible to meet such
demands in a high volume business with tight margins.
There is a commitment from the Company to examine ways
of improving conditions if and when the plant becomes
profitable.
RECOMMENDATION:
The Court has given careful consideration to all the points made
by the parties in their lengthy written and oral submissions. The
Court also examined in detail the financial information submitted.
Taking into account all the circumstances of the case the Court
recommends that the Company increase its offer for phase 2 of the
P.C.W. to a total of 4% from 1st March, 1995 and that this revised
offer be accepted.
The Court notes that the Company has offered to introduce a full
job evaluation system that would deal with the relative value of
job slots. The Court is of the view that this is the best way
forward for the employees and accordingly recommends the setting
up of a joint job evaluation (with professional assistance if
necessary) during the currency of phase 2 of P.C.W..
It was obvious at the hearing that there has been a problem with
communication between the management and the Employee Council.
The Court urges both parties to address this problem as a matter
of urgency.
~
Signed on behalf of the Labour Court
14th August, 1995 Evelyn Owens
F.B./D.T. ____________
Chairman
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.